The project is under discussion between Forscot, an initiative established by five forest industry executives, and Alcan, the company that owns the proposed site at Cromarty Firth.

The plans include the building and operation of a pulp mill, paper mill, saw mill and renewable energy plant, which will use Sitka spruce grown in Scotland and northern England.

The pulp mill will produce 550,000 tonnes per year of A+ grade northern bleached softwood kraft (NBSK) pulp, which can be used for fine and magazine paper grades and as a strengthening additive for recycled grade products. Currently this grade is only produced in Canada.

The paper mill is set to manufacture 420,000 tonnes of mechanical publication papers per year, possibly supercalendered (SC) or SC+ grades, which will be used for advertising material and magazines.
The main market for its production will be mainland Europe, but a quantity would be sold in the UK.

Forscot chairman Ed Gillespie said the group aimed to raise the funding in three stages, through equity and borrowing.
Forscot has secured the first stage of funding for the project, which includes a grant of 200,000 from Ross and Cromarty Enterprise.
The company hopes to begin construction in 2006 and start manufacturing products in 2008.

Once the funding is in place, Gillespie said the plan would be to appoint a management team to run the business.

The site is currently home to the Cromarty Firth Industrial Park, housing 11 businesses and employing a total of 200 people.

Alcan Smelting and Power UK corporate affairs manager John McCabe said discussions on the site sale would continue "for as long as it takes".

Story by Andy Scott